Brinkibon v Stahag Stahl

[1983] 2 AC 34

Summary

The court reaffirmed that acceptances sent by instantaneous forms of communication are effective from when they are received rather than from when they are sent.

Facts

The claimant Brinkibon Ltd was a company based in London. They bought steel from the defendant Stahag Stahl, based in Austria. The claimants sent their acceptance of the offer by Telex, which was to the defendants in Vienna. Brinkibon Ltd later wanted to sue Stahag Stahl for breach of contract in England, but they could only do this if the contract was formed in England. Otherwise, the case would be dealt with under Austrian law as desired by the defendants.

Issue

Whether acceptances made by instantaneous communication are effective from when they are sent or when they are received.

Held

The court sided with Stahag Stahl and held that the contract was formed in Austria because acceptances sent by instantaneous communication methods are only effective from when they are received. As the communication of acceptance was received by Telex in Vienna, this was when the contract was created. So, the suit would have to go through the Austrian courts. The court reaffirmed the Entores v Miles Far East Co decision, which stated that the postal rule did not apply to instantaneous communication forms, which include Telex. However, the court also noted that there was no universal rule. Each case would have to be resolved by looking at the parties' intentions and sound business practices.